Sonoma County selling and buying season here in the lovely “Wine Country” just an hour north of the “Gate” is flat with sales down 2% over last year but the bigger issue–Inventory! Usually March will signal the beginning of the “Selling” season by more homes coming onto the marketplace. March was a GOOD month but instead of being the beginning of an inventory surge–it was the end. March was our best month and inventory has been declining since. WHAT are the reasons? Below is a slide from the California Association of Realtors. I’ve added on the last three.
I think the “Off Market” or “pocket listings” is an issue but I’ve NOT seen any hard numbers on it. I’m waiting for CAR or perhaps Core-Logic, to come out with a study showing MLS sales vs. recorded sales. I know in our super tight inventory market, Realtors/Agents are always asking to see new listings not yet on the market. We hear of sales being made off MLS all the time. I keep waiting for the law suit which will define this isssue to apppear. Sellers and their Realtor/Agents who state, “They got their price.” really have no idea at how much that “price” could have been! The current disclosures by CAR, reflect this very issue which came out of the ’89 market scarcity.
Our “new” home construction is woefully in adequate in meeting the housing needs of our populace. Rents have gone up faster than housing prices. We are displacing our workforce. Some landlords have all the compassion of Attila the Hun when vacating a building for renovations. We are haring grumblings of rent control and one City Council person here in Santa Rosa actually proposed an “emergency ordinance” seeking to limit rent increases to 3% for 45 days. She called it a “cooling-off” period. She didn’t say that the “emergency” could be extended for 10 months. In other words, “rent control”. She didn’t get the vote
s and tried it again in a normal council setting—still didn’t get the votes but it is NOW on the table.
Capital Gains/Property Taxes—we are dealing with Buyers now who are considering selling their home in the super-hot San Francisco/Peninsula area and moving north to the less expensive “wine-country” (Median home price in SF $1,100,000 vs. “Wine County” of $550,000) but are getting hammered by capital gains AND property taxes. One client stated, after their $500,000 capital gains forgiveness, costs of sale and original basis, they would have to write a check to the IRS/State for $400,000. Plus, their new property tax bill would be $15,000 per year. They are staying put.
And what about all those retiring baby-boomers? “empty-nesters”, those folks who are now back to
being a “couple” due to kids fleeing the nest, are BACK to being a “family” again with the kids moving back in. Some are there due to college educations and hopefully “temporary” unemployment but more we are seeing kids who may have lost their home back with Mom and Dad. This scenario equates to three possible sales. Mom and Dad help the kids buy a homes (#1), Mom and Dad sell their big, family home (#2) and then they move down to a single level, in town, new home (#3). However, due to the capital gains and property tax issues, many “empty nesters” are staying put, perhaps building a granny-unit “rental” for additional income or even opening up their home to an “AirB&B” or “VRBO” scenario. Many are making their homes “aging-in-place’ friendly and just staying put.
Lastly, the big decline in home prices in our area due to the “great recession” linger still. Our medi
an home price increased in the past three years 58% but we still have many homeowners in trouble and underwater. And the foreclosure market, though virtually gone from the local MLS in measurable sales/listings, still lingers with many homes in “pre-foreclosure”. The number of homeowners selling due to a defaulted loan are troubling. At least many now have some equity.
So I’m left with that great saying from a 80’s commercial for a hamburger chain, “Where’s the bee
f”! Or in our case, “Where’s the Homes for sale”.